Pending the posting of grades (knock on wood), I think I’ve finished the ten credits for the certificate offered through work with Georgetown. At the point, I don’t think I’m enrolling in the LLM program; even with the 10 credits already earned, I’d have to take 14 more credits at $2,160 per credit (and climbing steadily), which is ridiculous, economically-speaking, since I’m not sure the LLM would necessarily earn the cost back. Over time, maybe, but it would only be done by changing jobs, which I’m not entirely sure I want to do at the moment or in the immediate future.

Anyway, although I hope to be finished with the certificate, I enrolled in one of the spring classes because I think it will be useful. And yet again Basic v. Levinson is assigned. It’s good law and I feel like I get better insight every time I read it. But I also feel like the dissent about fraud on the market theory’s idea that capital markets are efficient and/or rational is key. Maybe market structures are, but the actors in the market are human beings, who generally are not always rational or efficient. Which makes the theory wobbly for me. I mean, all you have to do is look at all the things the market got wrong, for one reason or another, in the last century, and the idea of efficiency and rationality kind of fades IMO.

But I’m not an economist or theorist, but a pessimist, so maybe this is just me being glass half empty.

And now that my homework for the week is finished, I can find fiction to read 🙂

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2 responses to “Reading homework”

The idea is that *on aggregate* markets behave efficiently, as if the individuals who make them up were completely rational. The theory doesn’t require that individuals actually BE rational, just that their ‘irrationalities’ are in sort of random directions and in effect cancel each other out. That’s the case in some markets, but definitely not in all of them. Sometimes individuals have biases that mean the irrationalities are in the same direction, and therefore the aggregate market gets it wrong. To quote a well-known behavioural economist, the problem is when people are “predictably irrational”.

The problem for me is that the market participants I come in contact with are generally profoundly irrational in vastly different ways. They are a minority and maybe not statistically significant in comparison to institutional actors, but they make it hard for me to believe in the aggregate efficiency of the market.